Why the Success of Tenders Depend on the Cost Estimating Performance: Answers and Explanations

All the participants of tender always need to be well-prepared for the procedure of selection of the best candidate for construction purposes. The client chooses the company that offers the best conditions for building a project. These are terms, costs, regulations, management backgrounds, and other aspects.

As a contractor, the performer needs to have a skilled team including the architect, interior designers, builders, managers. When the whole mechanism works well, the chances to get the order increase as well. Moreover, many processes can be delegated to the systems nowadays. For example,the project bidding software will come in handy for accurate cost estimation that is a must to hit the objective in the context of the tendering process.

Peculiarities of the Tender Process

According to the regulations required by Single Stage Selective Tendering, there is a range of proceedings to take into account:

 
  1. The Committee creates a list of the most optimal contractors to invite. The invitation letters are sent to the companies that might be interested in participating. The preparation for the tender starts in 4-7 weeks. At this period of time, potential contractors are informed about the opportunity to take part in the tendering process.

  2. The invitation usually includes a brief description of the planned project with the key insights from the client (some requirements and other extra information). The construction and tender commencement dates are also specified.

  3. The list of tendering process participants should contain no more than six companies. These contractors should confirm their readiness to take part in the tender. Some small construction projects require short preparation terms from tendering. The invitations can be sent to contractors in 3-4 weeks before the planned tendering process.

  4. All the participants together with the tendering committee should prepare special-purpose documentation beforehand. All the costs and terms should be specified in the documents provided by the contractors. This is the guarantee that all the key data entries will not be changed during the tendering process.

  5. The contractors are allowed to quit the tender at any time they want. There are many reasons that force companies to leave the tendering process like other profitable orders or force-majeure. The decision to withdraw is final and cannot be unthought.

  6. If the client picks sides with the most suitable contractor for the construction purposes, it is necessary to inform the chosen company and sign the contract between two parties (a client and a contractor). The consumer has the right to approve the candidate and send a list of corrections to change the tendering documentation of the building company.

  7. If the corrected offer from the client is not optimal for the contractor, it is possible to decline the proposition. If the company agrees with the mistakes and some inaccurate calculations, all the errors should be corrected before the contract is signed. If the client has the architect and other specialists in the team, it is necessary to brief on these experts and discuss all the issues with the contractor’s representatives. 

Cost Estimating as the Essential Part of the Tendering Process

Sometimes even the best-matching construction companies do not succeed in tenders. The reason is their poor cost estimating background. For example, such necessary expenditures as toilet facilities or on-site safety arrangements are not taken into account. This way the client can see inaccuracies in estimates and decline the candidate even of the most well-performing contractors on the market.

It is the same story about overestimating. It means that the potential contractor can include too many expenditures in comparison with other participants of the tendering process. Pay attention not only to required documentation like specifications and drawings, schedule and rates, cost plus, and so on. Be sure that cost estimating is done the proper way with no faults and weak spots. Use bidding software to perform as the front-runner on any tender.

This post was written and contributed by the Construction Estimating & Bidding Automation Platform Conwize: https://conwize.io